GE is starting to let its research and development organizations in China take the lead on research projects, rather than just playing a supporting role to its global research headquarters in New York, says Xiangli Chen, the general manager of GE's China Technology Center.

Virtual energy: A researcher works in the power-conversion laboratory at GE’s China Technology Center in Shanghai. In the foreground are motors used to simulate wind turbines.

The 10-year-old center in Shanghai is one of GE's four global research centers and home to 1,300 researchers and engineers. An additional 700 researchers develop health-care-related projects in the country at two other locations. In the past, GE has focused on creating products in and for rich countries such as the United States, and these products were sometimes adapted for poorer countries. Now it's developing products in research facilities in China and selling them in China before finding new applications for these products in its more traditional markets. GE says this is essential for competing in China, where many companies are able to offer low-priced goods and create new products for emerging markets such as China and India, as well as richer countries.

The increased competition for GE from local companies in China is due in part to a massive push by the Chinese government to promote clean energy and R&D. In recent years, it has rolled out a range of renewable energy targets and financial incentives, including significant tax breaks for companies that invest in research related to energy.

Products are already starting to emerge from GE's new emphasis on research in China. One is a portable ultrasound machine originally created for use in rural areas. It's now being adopted by doctors in countries such as the United States. The GE research center has also been key for the development of wind-power technology, including power electronics hardware and software that allow wind turbines to keep operating after lightning strikes and other events cause sudden drops in voltage on the power grid. The center has now produced 20 patents in this general area, says Yunfeng Liu, the manager of GE's power conversion lab in Shanghai. Such technology can also make the grid more stable than it would be without the presence of wind turbines, by helping to maintain the necessary voltages and frequencies on transmission lines.

Although the scientists in Shanghai worked with researchers in GE research centers in other countries, Chen says they felt a sense of "ownership" as they took the lead on key technologies. That could be important for the future of the research center, which is facing increasing competition from local companies and other multinationals to attract qualified researchers. "Five to 10 years ago, it used to be that multinationals were the only game in town. You could get the best talent," he says. Now, the new companies are trying to hire away veteran researchers from GE, he says. But he says that allowing the center to lead projects will help keep these workers around. "You have to have a leading role, rather than a supporting role, to really make it exciting," he says.